Meet the Indian startups that are demystifying blockchain

Blockchain is a digital ledger of transactions that everyone in of transactions that everyone in the particular network can see.Its design makes for absolute trust in the data.Ranjani Ayyar | TNN | July 31, 2017, 09:47 IST

Blockchain, the technology behind bitcoins, is now seen as having applications across a wide range of areas, from financial services to land registries and healthcare records ­ any space where trust is important. Several entrepreneurs are trying to cash in with innovative solutions

Rohas Nagpal's first introduction to blockchain was in 2011 when he was working with the cyber-crime department on a drug case that involved bitcoins. Research on the crypto-currency and the dark web led him to the technology behind it, blockchain. In August 2016, together with friend Shinam Arora, he set up Primechain Technologies with the objective of creating blockchain solutions.

Blockchain is a digital ledger of transactions that everyone in of transactions that everyone in the particular network can see. Its design makes for absolute trust in the data.

No single user controls it, only intended users can view the data, and if there's any attempt to tamper with the data, it's immediately apparent. So it allows you to deal with people who you have ordinarily no reason to trust, and without having to go through a neutral third party or regulator.

Nagpal says blockchain's features of transparency, auditability and provable immutability (being able to prove mathematically that the data has not been tampered with) make it a compelling solution. Primechain offers blockchain contract management solutions (secure storage and maintenance of digital contracts) and blockchain APIs (application programming interfaces that make for easy integration of block chain with existing IT systems).

The startup is also the tech provider for and runs BankChain, a community of 24 banks, including SBI, ICICI Bank, and Deutsche Bank, that is building and implementing blockchain solutions in areas like KYC, anti-money laundering, cross border payments, asset registry , and syndication of loans.

Though there are areas like supply chain management, land registries and healthcare records ­ indeed, any process that involves multiple parties looking for transparency ­ that are considering using blockchain, financial services is where the technology is being most rapidly adopted.

Advantage fintech

Ankur Pandey and Ankit Ratan, who worked together in a startup earlier, had been tracking bitcoins and their evolution. It encouraged them to set up, along with Arpit Ratan who had a background in law, a company called Signzy that offered solutions driven by a combination of blockchain and artificial intelligence (AI).

Signzy today has 28 clients, most of them financial institutions. “In the physical world, we need to establish trust between two parties through processes and documents. We help companies establish trust digitally,“ says Ankit.

Ravi Jagannathan, Venkatraman Viravanallur and Mohit Sethi were the founding members of eMudhra, the digital signature certifying authority .In early 2016, the three came together to set up KyrpC, a platform that enables companies to use simple drag and drop tools to get blockchain proofs of concept (POCs). Over the past six months, KrypC has worked with several organisations across the globe, including one of the Big Four consulting firms.

One of its projects was a confidential messaging solution for a large financial services company . “Multiple parties like the buyer, seller, broker are engaged in trading in different financial instruments and all the communication is happening through emails or WhatsApp. If this is put on blockchain, it becomes a much more trustable and immutable solution,“ says Jagannathan.

Anup Purohit, CIO, Yes Bank, says fintech startups bring a lot of inherent strengths and help the bank stay ahead of the innovation curve by co-creating industry-first solutions. Yes Bank and fintech startup Cateina Technologies together developed a blockchain solution that reduced the bill discounting process from four days to real-time.

Harshal Kamdar, partner, PwC, says that while the role of the regulator cannot be reduced in a sector like financial services, blockchain as a tool could offer leverage to players in terms of costs and compliance. For a bank that has, say , 1,000 branches, the costs and time involved in reconciling trades and transactions on a daily basis are huge. With blockchain, validation is instantaneous.

Scepticism & challenges

Not everybody is gung-ho about blockchain. Kunal Nandwani, co-founder and CEO of digitisation venture Hashcove says blockchain is unlikely to work in most use cases being spoken about today . “The basic tenet is that parties can trust each other without the presence of a regulator. The financial services sector cannot function without a regulator and in today's world, no bank is willing to share their client information,“ he says.

Toshendra Sharma, founder of blockchain venture RecordKeeper, says it will be another two-three years before blockchain becomes mainstream.

The challenges are many. The lack of awareness about blockchain has made it difficult to attract investors. Signzy is among the few that have raised funds - their funding came from Kalaari Capital in November last year.

Finding talent is a big struggle. Avijit Sarkar, who cofounded CapOne Research in Estonia, has interviewed at least 100 candidates in India, but finally brought in resources from Ukraine. “Countries like Estonia, Finland and Denmark are spearheading the blockchain movement. People there are ready to invest in learning and skilling themselves in the area,“ he says.

Sharma of RecordsKeeper is investing substantial time in teaching students on online platforms. Ankit of Signzy says adoption is a challenge. “Banks prefer to work with known names. With a tech as new as blockchain, sales cycles are longer because it takes time to prove its applicability ,“ he says.

But Karthik Iyer, founder of BlockchainMonk, which provides solutions and training for senior management and developers on blockchain, says since the technology is still evolving, there will be considerable effort involved in driving adoption.“For those who jump in and prove the technology , it is an exciting next few years.“